New Delhi. Some new rules are going to be implemented for UPI users from October 15, due to which many misconceptions are being spread on social media. First of all, understand that there will be no charge on every UPI transaction. Person-to-person payment made from one person to another will remain completely free as before. If you send money to your friend, family or someone close, no matter the amount, there will be no fees on it.
No charge even on small shopkeepers
If you make payment through UPI to street vendors, vegetable vendors, small shopkeepers, tea-samosa, golgappa or pani puri vendors, then there will be no charge on purchases up to ₹ 2000. Generally small daily purchases are less than ₹ 2000, so there will be no impact on the pocket of the common man.
When and from whom will MDR charges be levied?
The game now starts on purchases above ₹2000. If you buy goods worth more than ₹ 2000, then Merchant Discount Rate (MDR) i.e. 0.4% will be charged on that transaction. The thing to keep in mind is that this charge will not be paid by the customer, but by the merchant. Suppose you bought an air fryer worth ₹ 4000, then you will have to pay the entire ₹ 4000. Out of that ₹4000, the merchant will not pay the amount of 0.4% MDR to the government, but to the UPI company and the bank.
This money will not go to the government
A big misconception is that the MDR money will go to the government treasury. It's not like that. This money will go to those UPI app companies (like PhonePe, Paytm) and banks, which were providing services for free till now. This money will be used to further strengthen and improve the infrastructure of UPI.
What is the real concern?
The biggest problem is that the merchant may pass the burden of 0.4% MDR on the customers to save his profits. For example, if the price of an item is ₹ 4000 and the merchant has to pay 0.4% charge, then it is possible that he may increase the price of that item. In such a situation, ultimately the customer will have to bear the loss. The intention of the government is right, but it is necessary to ensure that its burden does not fall on the general public.
Fixed charge on large transactions
It has also been decided that a fixed charge of ₹300 will be levied on transactions of ₹75,000 or more. This will also apply to merchant payments only.